<PAGE>
PAGE 1
FINANCIAL PLANNING
IDS Utilities Income Fund
1994 annual report
(prospectus enclosed)
(Icon of) electrical plug
The primary goal of IDS Utilities Income Fund, Inc. is a high level
of current income. Secondary goals are growth of income and
capital. The fund invests primarily in securities of public
utility companies.
IDS
An American Express company
AMERICAN
EXPRESS
Distributed by IDS Financial Services Inc.<PAGE>
PAGE 2
(Icon of) electrical plug
Dependable dividends
Making money in the stock market isn't limited to trying to find
stocks with rising prices. Many investors prefer to focus on the
steady income stream provided by securities that pay substantial
dividends. And perhaps no segment of the market has a more
consistent record of paying dividends than the utilities industry--
the companies that provide basics such as electricity, water and
telephone service.<PAGE>
PAGE 3
PAGE
Contents
(Icon of) One open book inside of another.
The purpose of this annual report is to tell investors how the fund
performed.
The prospectus, which is bound into the middle of this annual
report, describes the fund in detail.
1994 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 20
IDS mutual funds 24
Federal income tax information 27
1994 prospectus
The fund in brief
Goals 3p
Types of fund investments 3p
Manager and distributor 3p
Portfolio manager 3p
Sales charge and fund expenses
Sales charge 4p
Operating expenses 4p
Performance
Financial highlights 5p
Total returns 6p
Key terms 7p
Investment policies and risks
Facts about investments and their risks 8p
Valuing assets 12p
How to buy, exchange or sell shares
How to buy shares 13p
How to exchange shares 15p
How to sell shares 15p
Reductions of the sales charge 19p
Waivers of the sales charge 20p
Special shareholder services
Services 21p
Quick telephone reference 21p
<PAGE>
PAGE 4
Distributions and taxes
Dividend and capital gain distributions 22p
Reinvestments 22p
Taxes 23p
How the fund is organized
Shares 26p
Voting rights 26p
Shareholder meetings 26p
Directors and officers 26p
Investment manager and transfer agent 28p
Distributor 29p
About IDS
General information 31p
<PAGE>
PAGE 5
To our shareholders
(Photo of) William R. Pearce, President of the fund
(Photo of) Richard H. Warden, Portfolio manager
From the president
As you read this report, you'll find it very different from those
you've received from us in the past. We've made substantial
changes in the design and organization to make the information
easier to find and understand.
The annual report and prospectus are combined into a single
document, and each provides information important to you. the
annual report gives you the fund's performance information and a
snapshot of its investments. A good place to begin is with the
portfolio manager's letter, which describes the events and
investment strategies that most influenced the fund's performance
during the year. The prospectus includes essential data such as
the fund's investment policies and service information.
In redesigning our reports, we asked IDS financial planners and
some of you for suggestions and recommendations. We believe that
you'll find the results of our work worthwhile.
William R. Pearce
From the portfolio manager
A major change in the investment environment led to an up-and-down
performance for IDS Utilities Income Fund during the past fiscal
year. After falling interest rates set the stage for a strong gain
during the last half of 1993, rising interest rates reversed that
trend in 1994 and ultimately resulted in a slight loss for the fund
on a total return basis. (Total return factors in net asset value
change as well as dividends and capital gains.)
Interest rates have a direct and important effect on utilities
stocks. When rates fall, the prices of the stocks typically go up;
when rates rise, stock prices typically go down. During the last
six months of 1993, interest rates in the United States generally
were on a downtrend. In that environment, utilities attracted
considerable interest from investors in search of yields higher
than were available on other investments such as certificates of
deposit.
All the major sectors of our domestic utility holdings--electric,
telephone and natural gas companies--performed well until November
when concern about deregulation and competition in the electric
utility industry and a rise in interest rates caused all utilities
to decline in price.
In February, the Federal Reserve Board began raising interest rates
to head off a potential rise in the rate of inflation. This
resulted in a sharp decline in all utility stocks, but particularly
the electric sector, which has higher yields and is more interest-
rate sensitive. In addition, several electric utilities cut their
dividends as a result of competitive threats and negative
regulatory decisions. Even in this deteriorating environment for<PAGE>
PAGE 6
utilities, the fund's dividend has provided an above-average yield.
The fund's performance was aided by having some exposure to strong-
performing utilities stocks in foreign markets. These stocks
comprised close to 25% of the portfolio's assets, the maximum
allowed by the fund's guidelines. Among the countries represented
were Canada, Mexico, South Africa, Hong Kong, the United Kingdom
and New Zealand.
Portfolio shifts
During the latter part of the period, we made some moderate shifts
in the portfolio, including increasing our holdings of natural gas
stocks, which offered good price value. We reduced our foreign
exposure last winter as those securities became undervalued, but
have since shifted more dollars back into foreign markets. We also
sold a number of stocks to lock in profits late last year, which
created a capital gain payout.
As for the future, assuming interest rates stay relatively stable
or at least rise only gradually, we expect the environment for
electric utilities to be considerably calmer during the months
ahead. While our expectations for the rest of the year remain
modest due to the ongoing interest rate uncertainty, we are
confident that the portfolio is well-positioned to continue to
provide a healthy and steady dividend stream and longer-term
capital appreciation to shareholders.
Richard H. Warden
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1994 $6.23
June 30, 1993 $7.05
Decrease $0.82
Distributions
July 1, 1993 - June 30, 1994
From income $0.49
From capital gains $0.26
Total distributions $0.75
Total return* (1.7%)
*If you purchased shares in the fund during this period, your
return also would have been affected by the sales charge, as
described in the prospectus.<PAGE>
PAGE 7
<TABLE>
IDS Utilities Income Fund, Inc.
Your fund's ten largest holdings
<CAPTION>
(Pie chart) The ten holdings listed here make up 22.14% of the fund's net assets
____________________________________________________________________________________________________
Percent Value
(as fund's net assets)(as June 30, 1994)
_____________________________________________________________________________________
<S> <C> <C>
McCaw Cellular 3.98% $25,875,000
McCaw Cellular Communications is the nation's largest cellular
telephone company.
U S WEST 2.57 16,750,000
Provides telecommunications services to more than 40% of the
United States in 14 western states.
Enron 2.52 16,375,000
Enron Corp. is an integrated natural gas company divided into four
business segments: Enron Pipeline Group ia an interstate, federally-
regulated pipeline; Enron Gas Services is a relatively new business
that was created to meet the need for long-term gas contracting; Enron
Power is a builder and operator of cogeneration projects worldwide;
and Enron Liquid Fuels is one of the nation's processors on natural gas.
Duke Power 1.92 12,512,500
Duke Power Company provides electric service to North and South
Carolina, with markets being Charlotte, Greensboro and Greenville.
BellSouth 1.90 12,350,000
Provides telecommunication services to Florida, Georgia, Louisiana,
Tennessee, North Carolina, Alabama, South Carolina, Kentucky and
Mississippi.
Pacific Telesis Group 1.90 12,350,000
The sixth-largest U.S. telephone holing company, it provides local
phone service in parts of California and Nevada.
Northern States Power 1.89 12,337,500
Northern States Power Co. is a well-run electric and gas utility serving
Minnesota,Wisconsin, North and South Dakota, and Michigan, with
Minneapolis-St. Paul as the principal service area. Primarily an electric
utility, the company's fuel mix is 60% coal, 40% nuclear, with negligible
amounts of hydro and gas.
Escom (11% Bond Series E 2008) 1.89 12,313,194
South African electric utility.
Telefonica De Espana 1.85 12,075,000
Spain's monopoly operator of basic telephone and telex services.
Cable & Wireless 1.72 11,175,000
Cable & Wireless is a leading international provider of
telecommunication services in Hong Kong, the United Kingdom,
the United States and 30 other countries.
</TABLE>
<PAGE>
PAGE 8
Making the most of your fund
Average annual total return
(as of June 30, 1994)
1 year 5 years Since inception*
- -6.58% +9.59% +11.15%
*Aug. 1, 1988
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures include the effect of a 5% sales charge. This was a period
of widely fluctuating security prices. Past performance is no
guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, one of the best ways to use
the fund is by dollar-cost averaging -- a time-tested strategy that
can make market fluctuations work for you. To dollar-cost average,
simply invest a fixed amount of money regularly. You'll
automatically buy more shares when the fund's share price is low,
fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
<PAGE>
PAGE 9
Your fund's long-term performance
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments do
well
o you receive capital gains when the gains on investments sold
by the fund exceed losses
o you receive income when the fund's stock dividends, interest
and short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.
How your $10,000 has grown in IDS Utilities Income Fund
$18,680
Utilities Income Fund
S&P 500
Stock Index
$9,500
'88 '89 '90 '91 '92 '93 '94
Assumes: Holding period from 8/1/88 to 6/30/94. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the fund's current prospectus. Reinvestment of all income and
capital gain distributions for the fund, with a value of $6,843.
Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of
common stocks, is frequently used as a general measure of market
performance. However, the S&P 500 companies are generally larger
than those in which the fund invests.
On the chart above you can see how the fund's total return compared
to a widely cited performance index, the S&P 500. In comparing
Utilities Income Fund to this index, you should take into account
the fact that the fund's performance reflects the maximum sales
charge of 5%, while such charges are not reflected in the
performance of the index. If you were actually to buy either
individual stocks or growth mutual funds, any sales charges that
you pay would reduce your total return as well.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
Average annual total return (as of June 30, 1994)
Since
1 year 5 years 8/1/88
- -6.58% +9.59% +11.15%
<PAGE>
PAGE 10
IDS Utilities Income Fund, Inc.
Annual Financial Information
___________________________________________________________________
Independent auditors' report
The board of directors and shareholders
IDS Utilities Income Fund, Inc.:
We have audited the accompanying statement
of assets and liabilities, including the
schedule of investments in securities, of
IDS Utilities Income Fund, Inc. as of
June 30, 1994, and the related statement of
operations for the year then ended and the
statements of changes in net assets for
each of the years in the two-year period
ended June 30, 1994, and the financial
highlights for each of the years in the
five-year period ended June 30, 1994, and
for the period from August 1, 1988
(commencement of operations) to June 30,
1989. These financial statements and the
financial highlights are the responsibility
of fund management. Our responsibility is
to express an opinion on these financial
statements and the financial highlights
based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards.
Those standards require that we plan and
perform the audit to obtain reasonable
assurance about whether the financial
statements and the financial highlights are
free of material misstatement. An audit
includes examining, on a test basis,
evidence supporting the amounts and
disclosures in the financial statements.
Investment securities held in custody are
confirmed to us by the custodian. As to
securities purchased and sold but not
received or delivered, and securities on
loan, we request confirmations from
brokers, and where replies are not
received, we carry out other appropriate
auditing procedures. An audit also includes
assessing the accounting principles used
and significant estimates made by
management, as well as evaluating the
overall financial statement presentation.
We believe that our audits provide a
reasonable basis for our opinion.<PAGE>
PAGE 11
IDS Utilities Income Fund, Inc.
Annual Financial Information (continued)
___________________________________________________________________
In our opinion, the financial statements
referred to above present fairly, in all
material respects, the financial position
of IDS Utilities Income Fund, Inc. at
June 30, 1994, and the results of its
operations for the year then ended and the
changes in its net assets for each of the
years in the two-year period ended June 30,
1994, and the financial highlights for the
periods stated in the first paragraph
above, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
August 5, 1994
<PAGE>
PAGE 12
<TABLE>
Financial statements
Statement of assets and liabilities
IDS Utilities Income Fund, Inc.
June 30, 1994
<CAPTION>
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investment in Securities, at value (Note 1)
(identified cost $649,677,119) $641,497,534
Receivable for investment securities sold 109,705,790
Dividends and accrued interest receivable 5,052,452
U.S. government securities held as collateral (Note 4) 20,501,724
Receivable for foreign currency contracts held, at value (Notes 1 and 5) 3,542,917
_____________________________________________________________________________________________________________
Total assets 780,300,417
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 2,218,308
Dividends payable to shareholders 383,252
Payable for investment securities purchased 86,922,039
Payable upon return of securities loaned (Note 4) 35,689,724
Payable for foreign currency contracts held, at value (Notes 1 and 5) 3,547,097
Accrued investment management and services fee 293,527
Accrued distribution fee 33,246
Accrued transfer agency fee 82,827
Other accrued expenses 232,200
_____________________________________________________________________________________________________________
Total liabilities 129,402,220
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $650,898,197
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares $.01 par value;
outstanding 104,484,521 shares $ 1,044,845
Additional paid-in capital 645,455,323
Undistributed net investment income (Note 1) 1,206,378
Accumulated net realized gain on investments 11,375,416
Unrealized depreciation of investments (Note 5) (8,183,765)
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $650,898,197
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 6.23
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 13
Financial statements
Statement of operations
IDS Utilities Income Fund, Inc.
Year ended June 30, 1994
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
<S> <C>
Income:
Dividends (net of foreign taxes withheld of $700,188) $ 31,834,977
Interest (net of foreign taxes withheld of $5,150) 7,329,844
_____________________________________________________________________________________________________________
Total income 39,164,821
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 3,921,286
Distribution fee 417,359
Transfer agency fee 1,036,792
Compensation of directors 19,750
Compensation of officers 7,354
Custodian fees 181,359
Postage 187,590
Registration fees 87,884
Reports to shareholders 63,433
Audit fees 20,500
Administrative 11,455
Other 21,694
_____________________________________________________________________________________________________________
Total expenses 5,976,456
_____________________________________________________________________________________________________________
Investment income -- net 33,188,365
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions (including loss of $20,069
from foreign currency transactions) (Note 3) 33,152,763
Net change in unrealized appreciation or depreciation of investments (79,156,630)
_____________________________________________________________________________________________________________
Net loss on investments and foreign currency (46,003,867)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(12,815,502)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 14
Financial statements
Statements of changes in net assets
IDS Utilities Income Fund, Inc.
<CAPTION>
_____________________________________________________________________________________________________________
Operations and distributions 1994 1993
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 33,188,365 $ 24,595,673
Net realized gain on investments and foreign currency 33,152,763 31,565,679
Net change in unrealized appreciation or depreciation (79,156,630) 39,240,283
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (12,815,502) 95,401,635
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (33,138,713) (24,936,670)
Net realized gains on investments (47,384,723) (13,861,585)
Excess distribution of realized gain (Note 1) -- (261,962)
_____________________________________________________________________________________________________________
Total distributions (80,523,436) (39,060,217)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
30,856,915 and 33,774,182 shares (Note 2) 218,564,064 225,119,401
Net asset value of 11,002,888 and 5,503,375 shares
issued in reinvestment of distributions 75,411,470 36,193,325
Payments for redemptions of
30,240,418 and 10,312,207 shares (204,489,583) (68,670,135)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
11,619,385 and 28,965,350 shares 89,485,951 192,642,591
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets (3,852,987) 248,984,009
_____________________________________________________________________________________________________________
Net assets at beginning of year 654,751,184 405,767,175
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$1,206,378 and $172,148) $650,898,197$654,751,1
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 15
Notes to financial statements
IDS Utilities Income Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment
Company Act of 1940 (as amended) as a
diversified, open-end management investment
company. Significant accounting policies followed
by the fund are summarized below:
Valuation of securities
All securities are valued at the close of each
business day. Securities traded on national
securities exchanges or included in national
market systems are valued at the last quoted
sales price; securities for which market
quotations are not readily available, are valued
at fair value according to methods selected in
good faith by the board of directors.
Determination of fair value involves, among other
things, reference to market indexes, matrixes and
data from independent brokers. Short-term
securities maturing in more than 60 days from the
valuation date are valued at the market price or
approximate market value based on current
interest rates; those maturing in 60 days or less
are valued at amortized cost.
Option Transactions
In order to produce incremental earnings, protect
gains, and facilitate buying and selling of
securities for investment purposes, the fund may
buy or write options traded on any U.S. or
foreign exchange or in the over-the-counter
market where the completion of the obligation is
dependent upon the credit standing of the other
party. The fund may also buy and sell put and
call options and write covered call options on
portfolio securities and may write cash-secured
put options. The risk in writing a call option is
that the fund gives up the opportunity of profit
if the market price of the security increases.
The risk in writing a put option is that the fund
may incur a loss if the market price of the
security decreases and the option is exercised.
The risk in buying an option is that the fund
pays a premium whether or not the option is
exercised. The fund also has the additional risk
of not being able to enter into a closing
transaction if a liquid secondary market does not
exist.
<PAGE>
PAGE 16
Notes to financial statements
IDS Utilities Income Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
Option contracts are valued daily at the closing
prices on their primary exchanges and unrealized
appreciation or depreciation is recorded. The
fund will realize a gain or loss upon expiration
or closing of the option transaction. When
options on debt securities or futures are
exercised, the fund will realize a gain or loss.
When other options are exercised, the proceeds on
sales for a written call option, the purchase
cost for a written put option or the cost of a
security for a purchased put or call option is
adjusted by the amount of premium received or
paid.
Foreign currency translations and
forward foreign currency contracts
Securities and other assets and liabilities
denominated in foreign currencies are translated
daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the
purchase or sale of securities and income and
expenses are translated at the exchange rate on
the transaction date. It is not practicable to
identify that portion of realized and unrealized
gain (loss) arising from changes in the exchange
rates from the portion arising from changes in
the market value of investments.
The fund may enter into forward foreign currency
exchange contracts for operational purposes and
to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign
currency underlying all contractual commitments
held by the fund and the resulting unrealized
appreciation or depreciation are determined using
foreign currency exchange rates from an
independent pricing service. The fund is subject
to the credit risk that the other party will not
complete the obligations of the contract.
Federal taxes
Since the fund's policy is to comply with all
sections of the Internal Revenue Code applicable
to regulated investment companies and to
distribute all of its taxable income to
shareholders, no provision for income or excise
taxes is required.<PAGE>
PAGE 17
Notes to financial statements
IDS Utilities Income Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
Net investment income (loss) and net realized
gains (losses) may differ for financial statement
and tax purposes primarily because of the
deferral of losses on certain futures contracts,
the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax
purposes, and losses deferred due to "wash sale"
transactions. The character of distributions made
during the year from net investment income or net
realized gains may differ from their ultimate
characterization for federal income tax purposes.
The effect on dividend distributions of certain
book-to-tax differences is presented as "excess
distributions" in the statement of changes in net
assets.
Also, due to the timing of dividend
distributions, the fiscal year in which amounts
are distributed may differ from the year that the
income or realized gains (losses) were recorded
by the fund.
On the statement of assets and liabilities, as a
result of permanent book-to-tax differences,
undistributed net investment income and
accumulated net realized gain have been increased
by $954,578 and $20,070, respectively, resulting
in a net reclassification adjustment to decrease
paid-in-capital by $ 1,004,648.
Dividends to shareholders
Dividends from net investment income, declared
daily and paid each calendar quarter, are
reinvested in additional shares of the fund at
net asset value or payable in cash. Capital
gains, when available, are distributed along with
the last income dividend of the calendar year.
Other
Security transactions are accounted for on the
date securities are purchased or sold. Dividend
income is recognized on the ex-dividend date and
interest income, including level-yield
amortization of premium and discount, is accrued
daily.
<PAGE>
PAGE 18
Notes to financial statements
IDS Utilities Income Fund, Inc.
___________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991,
the fund pays IDS Financial Corporation (IDS) a
fee for managing its investments, recordkeeping
and other specified services. The fee is a
percentage of the fund's average daily net assets
consisting of a group asset charge in reducing
percentages from 0.46% to 0.32% annually on the
combined net assets of all non-money market funds
in the IDS MUTUAL FUND GROUP and an individual
annual asset charge of 0.14% of average daily net
assets.
The fund also pays IDS a distribution fee at an
annual rate of $6 per shareholder account and a
transfer agency fee at an annual rate of $15 per
shareholder account. The transfer agency fee is
reduced by earnings on monies pending shareholder
redemptions.
IDS will assume and pay any expenses (except
taxes and brokerage commissions) that exceed the
most restrictive applicable state expense
limitation.
Sales charges by IDS Financial Services Inc. for
distributing fund shares were $6,900,337 for the
year ended June 30, 1994. The fund also pays
custodian fees to IDS Trust Company, an affiliate
of IDS.
The fund has a retirement plan for its
independent directors. Upon retirement, directors
receive monthly payments equal to one-half of the
retainer fee for as many months as they served as
directors up to 120 months. There are no death
benefits. The plan is not funded but the fund
recognizes the cost of payments during the time
the directors serve on the board. The retirement
plan expense amounted to $5,694 for the year
ended June 30, 1994.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities (other than short-term obligations)
aggregated $772,364,538 and $705,082,272,
respectively, for the year ended June 30, 1994.
Realized gains and losses are determined on an
identified cost basis.
<PAGE>
PAGE 19
Notes to financial statements
IDS Utilities Income Fund, Inc.
___________________________________________________________________
4. Lending of portfolio securities
At June 30, 1994, securities valued at
$34,601,338 were on loan to brokers. For
collateral, the fund received $15,188,000 in cash
and U.S. government securities valued at
$20,501,724. Income from securities lending
amounted to $157,663 for the year ended June 30,
1994. The risks to the fund of securities lending
are that the borrower may not provide additional
collateral when required or return the securities
when due.
Brokerage commissions paid to brokers affiliated
with IDS were $129,488 for the year ended June
30, 1994.
___________________________________________________________________
5. Foreign currency contracts
At June 30, 1994, the fund had entered into seven
foreign currency exchange contracts that obligate
the fund to deliver currencies at specified
future dates. The unrealized depreciation of
$4,180 on these contracts is included in the
accompanying financial statements. The terms of
the open contracts are as follows:
<TABLE>
<CAPTION>
U.S. Dollar value U.S. Dollar value
Currency to be as of Currency to be as of
Exchange date delivered June 30, 1994 received June 30, 1994
____________________________________________________________________________________________________
<S> <C> <C> <C> <C>
July 1, 1994 4,411,110 $ 163,374 163,617 $ 163,617
Philippine Peso U.S. Dollar
July 5, 1994 2,445,770 90,584 90,150 90,150
Philippine Peso U.S. Dollar
July 5, 1994 3,342,844 123,809 123,855 123,855
Philippine Peso U.S. Dollar
July 5, 1994 222,527 222,527 308,444 223,114
U.S. Dollar Canadian Dollar
July 6, 1994 139,555 139,555 193,479 139,954
U.S. Dollar Canadian Dollar
July 6, 1994 3,265,472 120,944 120,364 120,364
Philippine Peso U.S. Dollar
July 29, 1994 14,601,405 2,686,304 2,681,863 2,681,863
French Franc U.S. Dollar
__________ ___________
$3,547,097 $3,542,917
/TABLE
<PAGE>
PAGE 20
_______________________________________________________________________________
6. Financial highlights
"Financial highlights" showing per share data and
selected information is presented on page 5 of the
prospectus.
<PAGE>
PAGE 21
<TABLE>
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
<CAPTION>
____________________________________________________________________________________________________________________________
Common stocks (80.8%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Communications equipment (4.0%)
AirTouch Communications 300,000(b) $ 7,087,500
LIN Broadcasting 90,000(b) 10,777,500
MFS Communications 100,000(b) 2,475,000
Northern Telecom 200,000 5,525,000
____________
Total 25,865,000
_____________________________________________________________________________________________________________________________
Energy (1.1 %)
Amoco 125,000 7,125,000
_____________________________________________________________________________________________________________________________
Financial services (7.2%)
Alexander Haagan Property 200,000 3,575,000
Amer Health Property 120,000 2,880,000
Avalon Property 150,000 3,187,500
Burnham Pacific Property 200,000 3,400,000
First Industrial Realty 175,000(b) 4,134,375
JDN Realty 53,100 1,161,562
Malan Realty 175,000(b) 3,018,750
Merry Land & Investment 100,000 2,025,000
MGI Properties 75,000 1,096,875
Mills 170,000 3,825,000
Price Club REIT 94,500 3,260,250
Regency Realty 175,000 3,040,625
Simon Property 100,000 2,662,500
Sizeler Property Investment 275,000 3,506,250
Southwestern Property Trust 175,000 2,143,750
Summit Properties 200,000 4,000,000
____________
Total 46,917,437
See accompanying notes to investments in securities.
<PAGE>
PAGE 22
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Health care (2.5%)
Health Equity 500,000 $ 4,562,500
LTC Properties 300,000 4,012,500
Meditrust 120,000 4,080,000
Omega Healthcare Investors 150,000(e) 3,731,250
____________
Total 16,386,250
_____________________________________________________________________________________________________________________________
Utilities - electric (18.6%)
Allegheny Power System 350,000 7,350,000
Amer Electric Power 190,000 5,367,500
Central Los Angeles Electric 260,000 6,110,000
Cincinnati Gas & Electric 400,000(e) 8,700,000
DPL 300,000 5,925,000
Duke Power 350,000 12,512,500
DQE 140,000 4,147,500
IES Inds 200,000 5,175,000
LG&E Energy 165,000 6,022,500
Magma Power 125,000(b) 3,656,250
New York State Electric & Gas 200,000 4,750,000
Northeast Utilities 300,000 6,525,000
Northern States Power 300,000 12,337,500
PacifiCorp 400,000 6,750,000
Public Service Colorado 200,000 5,225,000
Rochester Gas & Electric 200,000 4,350,000
SCANA 107,300 4,600,488
Southern Co 400,000 7,500,000
UtiliCorp United 150,000 4,293,750
____________
Total 121,297,988
______________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 23
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Utilities - gas (10.8%)
Brooklyn Union Gas 275,000 $ 6,703,125
Cascade Natural Gas 136,100 1,939,425
Connecticut Energy 88,500 1,792,125
Enron 500,000 16,375,000
Equitable Resources 325,000 11,171,875
Natl Fuel Gas 150,000 4,406,250
New Jersey Resources 300,000 6,600,000
NICOR 175,000 4,615,625
Peoples Energy 50,000 1,168,750
Seagull Energy 110,000(b,e) 2,846,250
Sonat 175,000 5,381,250
Southwest Gas 100,000 1,800,000
Williams 200,000 5,725,000
____________
Total 70,524,675
_____________________________________________________________________________________________________________________________
Utilities - telephone (13.7%)
AT&T 100,000 5,437,500
BellSouth 200,000 12,350,000
McCaw Cellular 500,000(b) 25,875,000
MCI Communications 200,000 4,425,000
Pacific Telesis Group 400,000 12,350,000
Rochester Telephone 200,000 4,525,000
Southern New England Telecom 65,000 1,982,500
Southwestern Bell 125,000 5,437,500
U S WEST 400,000 16,750,000
____________
Total 89,132,500
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 24
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Foreign (22.7%)(c)
Ayala 4,251,900 $ 5,825,103
BCE 200,000 6,475,000
British Gas ADR 200,000(e) 8,300,000
Burgenland Holdings 55,000 2,165,020
Cable & Wireless 600,000(e) 11,175,000
Capex 150,000(b) 3,018,000
China Light & Power 1,000,000 5,110,000
Empresa Nacional de Electric ADR 100,000 4,487,500
Ericsson (LM) ADR 3,782,609 6,383,153
Evn-Energie Versorgun Niedr 15,000 1,834,485
Gem Property Trust 2,937,851 4,671,183
Hong Kong Electric 1,100,000 3,315,400
Hong Kong Telecom 2,000,000 3,776,000
Iberduero 1,250,000 8,802,500
Korea Electric Power 130,000 4,327,570
Lyonnaise Des Eaux & De L'Eclairage 30,000 2,748,570
Natl Power 1,500,000 10,086,000
New Zealand Telecom 800,000 2,158,400
New Zealand Telephone 100,000 4,250,000
Nokia Preference Free 35,000 2,861,110
Powergen 1,200,000 9,166,800
Sceptre Resources 600,000(b) 5,587,908
Tarragon Oil & Gas 150,000(b,d) 1,953,054
Tele Danmark ADR 205,000(b) 5,048,125
Telefonica de Espana ADR 300,000(e) 12,075,000
See accompanying notes to investments in securities.
<PAGE>
PAGE 25
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Foreign (cont'd)
Telefonos de Mexico Cl A ADR 75,000 $ 4,190,625
Veba 25,000 7,896,800
____________
Total 147,688,306
_____________________________________________________________________________________________________________________________
Miscellaneous (0.2%)
Holly 70,000 1,102,500
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $530,688,869) $526,039,656
_____________________________________________________________________________________________________________________________
<CAPTION>
Preferred stocks (5.2%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Boise Cascade
1.625% Cv 140,000 $ 3,010,000
Freeport-McMoran
$4.375 Cv 50,000(d) 2,293,750
See accompanying notes to investments in securities.
<PAGE>
PAGE 26
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Preferred stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Merry Land & Investment
1.75% Cm Cv 75,000 $ 2,025,000
Natural Gas
10.50% Cv 5,000,000 3,870,000
NEXTEL Communications
5.50% Cv 194,000 6,329,250
Philippine Long Distance
5.75% Cm Cv 70,000(d) 2,380,000
Tenneco
2.80% Cv 87,500 3,532,812
Transco Energy
$4.75 Cm Cv 105,000 5,276,250
Western Gas Resources
$50 Cv 110,000 4,826,250
_____________________________________________________________________________________________________________________________
Total preferred stocks
(Cost: $35,137,867) $ 33,543,312
_____________________________________________________________________________________________________________________________
<CAPTION>
Bonds (9.6%)
_____________________________________________________________________________________________________________________________
Issuer and Principal Value(a)
coupon rate amount
______________________________________________________________________________________________________________________________
<S> <C> <C>
Domestic (6.6%)
Appalachian Power
9.125% 1st Mtge 2019 $5,640,000 $ 5,759,850
See accompanying notes to investments in securities.
<PAGE>
PAGE 27
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer and Principal Value(a)
coupon rate amount
_____________________________________________________________________________________________________________________________
Domestic (cont'd)
Bell Telephone Pennsylvania
7.375% 2033 $5,000,000 $ 4,425,000
Carter Hawley Hale
6.25% Cv 2000 1,000,000(d) 920,000
Cointel
5.04% Cv 69,400(b,g) 4,094,600
Consolidated Natural Gas
7.25% Cv 2015 5,000,000 5,131,250
GTE South
9% Deb 2029 5,000,000 5,187,500
KENETECH
1.67% Cv 197,500(b,g) 3,999,375
Pacific Gas & Electric
7.25% 1st Mtge 2026 7,500,000 6,459,375
Pennsylvania Power & Light
9.25% 1st Mtge 2019 1,000,000 1,068,750
Public Service Electric & Gas
8.50% 1st Mtge 2022 2,970,000 2,947,725
Questar Pipeline
9.375% 2021 3,000,000 3,221,250
____________
Total 43,214,675
_____________________________________________________________________________________________________________________________
Foreign (3.0%)(c)
Escom
(South African Rand)
11% 2008 74,875,000 12,313,194
See accompanying notes to investments in securities.
<PAGE>
PAGE 28
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (continued)
_____________________________________________________________________________________________________________________________
Issuer and Principal Value(a)
coupon rate amount
_____________________________________________________________________________________________________________________________
Hydro-Quebec
(Canadian Dollar)
8.50% 2029 5,000,000 $ 4,800,000
TransCanada Pipeline
(U.S. Dollar)
9.875% 2021 2,000,000 2,222,500
____________
Total 19,335,694
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $64,486,186) $ 62,550,369
_____________________________________________________________________________________________________________________________
<CAPTION>
Short-term securities (3.0%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (0.5 %)
Federal Home Loan
Bank Disc Note
07-19-94 4.20% $1,700,000 $ 1,696,439
Federal Home Loan
Mortgage Corp Disc Note
07-01-94 4.19% $1,400,000 1,400,000
____________
Total 3,096,439
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 29
Investments in securities
IDS Utilities Income Fund, Inc.
(Percentages represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Short-term securities (continued)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
Commercial paper (2.5%)
Aon
07-13-94 4.31% $3,700,000 $ 3,694,709
Eiger Capital
07-25-94 4.37 3,900,000(f) 3,888,690
Ford Motor Credit
07-11-94 4.34 4,000,000 3,995,200
PepsiCo
07-22-94 4.27 4,000,000(f) 3,990,083
SBT Funding
07-12-94 4.35 700,000(f) 699,076
__________
Total 16,267,758
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $19,364,197) $ 19,364,197
______________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $649,677,119)(h) $641,497,534
______________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 30
Investments in securities
IDS Utilities Income Fund, Inc.
June 30, 1994
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Presently non-income producing.
(c) Foreign security values are stated in U.S. dollars. For bonds
principal amounts are denominated in the currency indicated.
(d) Represents a security sold under Rule 144A which is exempt from
registration under the Securities Act of 1933, as amended. This
security has been determined to be liquid under guidelines
established by the board of directors.
(e) Security is partially or fully on loan. See Note 4 to the
financial statements.
(f) Commercial paper sold within terms of a private placement
memorandum, exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers
in that program or other "accredited investors." This security has
been determined to be liquid under guidelines established by the
board of directors.
(g) PRIDES- Provisionally Redeemable Income Debt Exchangeable for
stock, are interest-bearing debt securities issued by one company
and mandatorily exchangeable to the ADS (American Depository
Shares) of another related company at maturity.
(h) At June 30, 1994, the cost of securities for federal income tax
purposes was $650,666,185 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
<S> <C>
Unrealized appreciation $22,083,964
Unrealized depreciation (31,252,615)
_____________________________________________________________________________________________
Net unrealized depreciation $(9,168,651)
_____________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 31
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conversation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
achieve high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to
provide high current income. Secondary objective is capital
growth.
(icon of) cornucopia
<PAGE>
PAGE 32
Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories,or the equivalent, and in
government bonds.
(icon of) greek column
IDS Strategy, Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund, Inc.
Invests in high quality corporate bonds and other highly-rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund, Inc.
Invests primarily in securities issued or guaranteed as to
principal and interest by the U.S. government, its agencies and
instrumentalities. Seeks a high level of current income and safety
of principal consistent with its type of investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and
notes to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes.
(icon of) shield with basket of apples enclosed
<PAGE>
PAGE 33
IDS State Tax-Exempt Funds
(California, Massachusetts, Michigan, Minnesota, New York, Ohio)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund, Inc.
Invests mainly in bonds and notes of state or local government
units, with at least 75 percent in the four highest rated, lowest
risk bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the Fund but does not guarantee
the market value of the Fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund, Inc.
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The Fund may invest up to 20
percent of its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the
world that offer potential for superior growth. Holding may range
from small- to large-capitalization stocks, including those of
companies involve in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest<PAGE>
PAGE 34
IDS Equity Plus Fund, Inc.
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund, Inc.
Invests primarily in common stocks of blue chip U.S. companies
representing almost every major sector of the economy. Seeks
current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to
provide high current income and growth of income and capital with
reduced volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to provide high
current income and, secondarily to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
<PAGE>
PAGE 35
Growth investments
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
IDS Discovery Fund
Invests in small and medium-sized, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy, Aggressive Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess knight
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in domestic companies with significant growth
potential due to superiority in technology, marketing or
management. The Fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The Fund holds
stocks for the long-term with the goal of capital growth.
(icon of) shooting star
<PAGE>
PAGE 36
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your IDS personal financial planner or writing to IDS Shareholder
Service, P.O. Box 534, Minneapolis, MN 55440. Read it carefully
before you invest or send money.
<PAGE>
PAGE 37
IDS Utilities Income Fund, Inc.
<TABLE>
Federal income tax information
______________________________________________________________________________
The fund is required by the Internal Revenue Code of
1986 to tell its shareholders about the tax treatment
of the dividends it pays during its fiscal year.
Some of the dividends listed below were reported to
you on a Form 1099-DIV, Dividends and Distributions,
last January. Dividends paid to you since the end of
last year will be reported to you on a tax statement
sent next January. Shareholders should consult a tax
adviser on how to report distributions for state and
local purposes.
IDS Utilities Income Fund, Inc.
Fiscal year ended June 30, 1994
Income distributions
taxable as dividend income,
59.08% qualifying for deduction by
corporations.
<CAPTION>
Payable date Per share
<S> <C>
Sept. 24, 1993 $0.0745
Dec. 29, 1993 0.2648
March 28, 1994 0.0792
June 28, 1994 0.0742
Total $0.4927
Capital gain distribution
taxable as long-term capital gain.
<CAPTION>
Payable date Per share
<S> <C>
Dec. 29, 1993 $0.2600
Total distributions $0.7527
The distribution of $0.5248 per share, payable
Dec. 29, 1993, consisted of $0.0848 derived from net
investment income, $0.1800 from net short-term capital
gains (a total of $0.2648 taxable as dividend income)
and $0.2600 from net long-term capital gains.
</TABLE>
<PAGE>
PAGE 38
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
Your IDS financial planner:
IDS Utilities Income Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 39
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
